BTC Correlation with Traditional Assets Increases Since 2020
Recent analysis from FTSE Russell highlights the increasing correlations between Bitcoin and various asset classes since 2020, particularly in risk-on environments. Key points include:
- The correlation between Bitcoin and the Russell 1000 index is 0.58.
- Bitcoin shows a correlation of 0.53 with US financial stocks and 0.52 with US tech stocks.
- BTC's correlation with US high-yield credit is at 0.49.
- Pre-COVID correlations were much closer to zero.
- 7-10 year US Treasurys did not experience increased correlation with BTC post-COVID.
- The US dollar exhibits a negative correlation with both Bitcoin and Ethereum.
- The BTC-gold correlation post-COVID is only 0.15.
The report suggests that Bitcoin and Ethereum are largely viewed as risk-on assets, while gold maintains its status as a safe haven.